EU Firms Stay Invested: Portugal & Romania Lead Amid Rising Risks to Capital Spending

The recent EIB Investment Survey 2025 corroborates a complex picture: firms across the EU are largely committed to investing, but under growing caution driven by external uncertainty and increasing costs. While 86% of surveyed EU firms plan to invest in the coming year—a slight decline from 2024’s 87%—there is a discernible shift in the nature of investment toward maintenance, replacement, and improvement over expansion. [3][10]

Firms’ optimism about sectoral prospects outpaces their sentiment toward the wider economic, regulatory, or political climate. Portuguese companies rank among the top in the EU in net investment expectation balance (+16%) and sector business outlook (+14%) despite being more pessimistic than average about the macro environment. [4][2] Romanian firms, though investing at lower absolute rates, show even stronger capacity expansion plans over the next three years (44%) versus the EU norm (26%). This suggests that perceived opportunities at local or sector levels (driven by EU funding, infrastructure, innovation) mitigate broader pessimism. [1][3][4][9]

Key barriers are consistent: uncertainty about the future (economic, geopolitical) and lack of skilled workers rank highest, along with high energy costs and regulatory complexity. These are cited more frequently by EU firms than their U.S. counterparts. [11][3] Nonetheless, some pressures—particularly supply chain disruptions—are easing slightly, while investment in digital technologies (including generative AI), and climate adaptation and mitigation, remain strong priorities. [3][1][9]

Strategic implications for investors and policymakers include: stronger differentiation in investment strategy by country and sector; elevated valuation of firms or regions managing to offer predictability, skilled labor access, regulatory clarity; opportunity for finance providers to address gaps in expansion-investment funding; and enhanced returns for early movers in AI, green transition, and resilient supply chain investments. Open questions include how high cost burdens (energy, labor, regulation) will evolve, whether expansion investment will pick up if macro risks abate, and how competitive dynamics vs. U.S. and China will affect policy reforms.